The solution set of technologies required for advertisers and publishers to do business in the modern age of media buying and selling has grown in complexity faster than the industry press has been able to explain the new technologies. For us, this topic hits close to home. The rise of technologies and market environments to support the requirements of market participants have created broad categories of technologies, each designed to address a specific set of problems. These technologies have grown into transactional environments that each support a particular type of market: real time bidding (open market), private marketplaces, programmatic direct, and programmatic futures.
The four transactional environments used to buy and sell media were defined well by Jed Nahum (@jednahum) in a good AdExchanger article. What we have found though is that a good understanding of the mechanics of each marketplace is still missing definition in the trade press. Here is a quick reference for our side-by-side:
When comparing the mechanics of the four marketplace models for transacting media, it is important to note both what happens and when it happens. What has been missing is a definition of what happens before the impression and after the impression in each market environment. To that end, we have built this handy-dandy comparison chart. Each square on the chart can be understood by completing the sentence:
In a [market - column heading] environment , the [functionality - row heading] [ color title - from key]
So, to understand the blue box in the upper right corner, we construct the following sentence: In a Real Time Bidding environment, the Bid is Determined Before the Impression.
Now that we have established the difference amongst transaction environments, let's get down to fleshing out Programmatic Futures. While the chart above seems to indicate the major difference between programmatic direct and programmatic futures is the timing of market dynamics in relation to the impression, it belies ancillary market functions that only exist or can only exist in an environments that operates mostly before the impression.
If marketplace technologies are going to be more than just dumb pipes, a combination of technologies need to be tightly integrated to facilitate the transacting of guaranteed media. To illustrate the difference, we created another nifty graphic showing the difference between the pipe that is programmatic direct and the array of services we have built to support a programmatic futures environment.
Think of the programmatic futures environment as the entire RTB stack, rebuilt in one platform specifically for guaranteed media transactions. Unlike programmatic direct, to effectively transact in a true market environment market participants need to ensure that the complex rules they use for determining the acceptability of counterparty orders are accounted for (compliance), they always get the best deal for their trade given market conditions (trade optimization), that they can dynamically price inventory based on market conditions (pricing), they can view and manage their portfolio of assets (brokerage), and have a clean and well lit place for buyers and sellers to come together to make deals (exchange).
So there you have it, a high level overview of the four types of programmatic markets and a bit more about the new programmatic futures market. There is still a lot that has been left unsaid. If you have any questions or comments, leave us your feedback. We would love to engage in a broader conversation about this topic.